Increasing NPA's in public sector banks "A threat to Indian PSB's

Banking sector is an imperative financial service sector in the economic growth of a nation. It facilitates channelization of funds for productive purpose, adjudicate funds flow from surplus to deficits units and also supports in the economic and financial policies of the government. Thus, the economic development and the banking development of a nation is invariably inter-related. However the magnitude of the problem of bad debts in India is increasing by every passing day and systematic evaluation and proper strategies are the need for the banks to eliminate this problem. It is very important for banks to maintain its asset quality and profitability for its survival and growth to fulfil its social objective of lending to the priority sector, employment generation mass branch network but prevalence of Non-Performing Assets (NPAs) is a major threat to Indian banking sector specially the public sector banks. Non-Performing Assets are also called bad debts or non-Performing loans which are provided by banks on which repayments or interest payments are not being made on time. Loans represent the assets of bank and in loan portfolio bad debts or NPAs affect the operational efficiency and profitability of banks, which reflect the liquidity and solvency position of banks. The study has been carried out to analyse the causes and effects of NPAs in public sector banks and to provide remedial suggestion to tackle the problem.